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NYSE Is Winning the IPO Listing War

Stocks in this article: NYX NDAQ FB

NEW YORK ( TheStreet -- There was some discussion earlier this week that Facebook (FB) could look to bolt from the Nasdaq OMX (NDAQ) exchange in the aftermath of its messy public debut last Friday.

The social networking giant was said to be talking to NYSE Euronext (NYX) about a jump to the Big Board, a move that would be highly unusual as it would mean breaking a contract that typically ends at the close of the year. Most transfers take place in December.

The fact that the reports even surfaced though brings back up the debate about which exchange is tops these days.

Both the NYSE and Nasdaq courted Facebook heavily. Facebook chose Nasdaq for a variety of excellent reasons, among them: A reputation for advanced technology and its formidable flashing presence in Times Square -- the heart of commercial New York -- a clear message when a company wants to reach out in a big way to the retail masses.

Nasdaq promoted its technology throughout the process of courtship, its marketers touting the fact the exchange had invented electronic trading 40 years ago and ithat ts computer hub could transmit (theoretically) more than 1 million messages per second at sub-100 microsecond average speeds.

The NYSE, on the other hand, was depicted as an outdated system with its fundamental trade operations linked to fallible humans.

But that ancient system, its roots go back to 1792, has been proven to have some stamina, even in its computer support systems.

"NYSE's technology offering and focus is quite different from Nasdaq's," which is primarily an exchange solution business," said analyst Jillian Miller of BMO Capital. "The NYX's offering is targeted at connectivity for buy and sell side institutions rather than providing an 'exchange in a box' for small exchange groups."

It is this difference that would have helped in the large and complicated Facebook offering.

While NYSE has a solid computing foundation, it still relies on humans within the network to make key decisions.

"It's exactly this human connection that ensures the strength of the NYSE," said Ken Polcari of ICAP Equities, an NYSE member firm. "We create orderly openings and closes, we have lower volatility, we have deeper/more liquid markets that in the end improve prices for all investors. We do not hide in a dark pool, we are in fact the most transparent, visible marketplace in the world."

Humans count, even in the most high-tech of IPOs. In the case of Facebook, Nasdaq unforgivably failed to keep the public apprised of its trading delays. Over at the NYSE, in the case of an IPO, if trading isn't being executed well, then one human walks over to another human on the floor of the exchange and begins to yell. That usually gets the message across.

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